Warehouse Space Is Expensive—Here’s How Pallets Affect How Much You Need
Warehouse space rental rates continue to grow and businesses continue to explore all possible solutions to fit as much inventory as possible into the least amount of space. They will explore new and innovative ways to make better use of their warehouse space, including investing in higher-quality racking, optimizing their inventory management systems and improving their warehouse layouts. While these are all great approaches to maximizing storage density, there is one important element that can greatly affect storage density and it is often overlooked, namely, the type of pallet used to transport and store merchandise in the warehouse.
There are many different types of pallets available today, varying in size, design and functionality. Each type of pallet can affect how much merchandise can be stored in a given space. For example, some pallets are able to hold a lot of merchandise vertically, while others may only be able to hold merchandise horizontally. Some pallets are designed to carry very heavy loads while others are made to carry lighter loads. Some pallets have openings on all sides and can be loaded/unloaded easily while other pallets have fewer openings, making them difficult to access.
In general, the difference between using the right pallet and the wrong pallet for the job can result in needing 20 – 30 percent more warehouse space to store the same amount of merchandise. The difference in the cost of renting the required space can be in the thousands of dollars per year, simply due to selecting the wrong pallet for the job.
The Reasonable Size Factor Many Ignore When Choosing Pallets
Standard pallet sizes are widely accepted and have been developed for a reason. They were created to meet common racking system requirements, shipping container standards and forklift operating clearances. However, “standard” does not mean universal. Standard pallets available in Australia are 1165 mm x 1165 mm. Standard pallets found throughout Europe are 1200 mm x 800 mm. Standard pallets found in the United States are 1219 mm x 1016 mm. There are also half-pallets, quarter-pallets and custom pallets that are designed for certain industries.
Where the importance of pallet size comes in to play is in the efficiency in filling the storage space in a warehouse. Warehouses that are designed for one pallet size will not be efficient with a different size pallet. Racking bays that are designed for 1165 mm pallets will not fit 1200 mm pallets. Conversely, racking bays that are designed for 1200 mm pallets cannot accommodate 1219 mm pallets. The mathematical impact is greater than one may think at first. If a warehouse has a 50 mm waste space between pallet positions, and there are 500 pallet positions, then this equates to 25 square meters of unused storage space in the warehouse. In a metropolitan area where the average rent for a warehouse is $150-$250 per square meter, per year, this translates to tens of thousands of dollars spent on unused space.
Stacking Height Makes a Difference
Not all pallets are designed to stack the same height. The pallet must be strong enough to carry the weight of the merchandise, which is why it’s crucial for businesses to use quality Pallet Products in Melbourne in order to remove any points of failure in the logistical process. The merchandise must be stable on the pallet. The racking system in place must also be capable of supporting the weight of the merchandise and pallets at the desired height.
If the maximum clearance in a warehouse is three meters, the standard pallet may only be able to support stacking of three pallets high. However, if a stronger pallet is selected, it may be possible to safely stack four or five pallets in the same three-meter vertical space. This represents a 33% increase in storage capacity without making any physical changes to the warehouse or racking.
This is where pallet quality is now a business decision as opposed to a purchase decision. Cheaper pallets that are not designed to handle heavy loads, do not stack reliably, will require warehouses to use lower racking positions or reduce loads per pallet. This results in warehouses requiring more floor space to store the same amount of merchandise.
Working with suppliers that understand load requirements — and can supply pallets that meet the operational needs — help businesses maximize the vertical space in their warehouses, rather than continually expanding horizontally.
Over-Specifying Pallets Is a Waste of Money
On the flip side of the coin, specifying pallets that are heavier duty than necessary is a waste of money and adds no additional benefit to the business. If the merchandise is light and the warehouse has standard ceiling heights, spending money on pallets that are rated for extreme stacking is unnecessary and only serves to increase pallet costs.
The Importance of Racking Efficiency and Pallet Design
The construction of pallets can have a dramatic effect on how pallets interact with racking systems. Four-way entry pallets provide more flexibility in tight spaces and can allow for more dense racking configurations. Two-way entry pallets require more manoeuvring room and therefore wider aisles and lower storage densities.
Deck board spacing is also important for racking efficiency. Pallets with narrower gaps between deck boards allow for closer spacing of rack beams and potentially more vertical storage levels. Pallets with wider gaps between deck boards require rack beams placed exactly under the stringers, limiting flexibility in rack configuration.
Double deck pallets (pallets with bottom boards) are stronger and more durable but heavier and more expensive. Single deck pallets save weight and cost but require proper support from racking beams. The selection of pallets will also dictate the racking specifications required to support them safely.
Businesses that do not consider the details mentioned above will find that their pallet choices will determine their racking options rather than the two being chosen together for optimal efficiency. The warehouse layout will be limited by pallet constraints rather than designed to achieve storage density.
Wasting Floor Space
Walking through a warehouse, observe how pallets are positioned in the racking system. There is usually space — between the pallet edge and the racking upright or between pallets in adjacent positions — that exists for practical purposes (clearance for forklifts, safety buffer against damage). However, these gaps quickly add up to wasted space.
A 50mm gap on each side of a pallet may not appear significant. However, multiply that gap across every pallet position in the facility and it becomes a considerable amount of wasted space. If switching to pallets that are better suited to the racking system and eliminate the gap between pallets and racking, the amount of saved space across multiple hundred positions can be equal to several additional rows of racking.
The situation worsens with non-standard or mismatched pallets. A warehouse designed for one pallet size that must accommodate different sized pallets will always have wasted space in every position. The racking can’t be too tightly configured (as the largest pallets wouldn’t fit) but the smaller pallets will always occupy oversized spaces with dead areas surrounding them.
Designing custom pallet sizes to meet the needs of a company’s products and racking system can pay for itself in terms of improved space efficiency. If custom pallets enable an additional row of racking to be added to the warehouse, the additional storage capacity generated may be worth many times the marginal cost of designing pallets to fit the specific needs of the business.
Load Configuration and Storage Capacity
The manner in which products are loaded onto pallets can greatly impact the number of units that can be stored in a warehouse. Products that hang off the ends of pallets cannot be stored as densely because they will need clearance from adjacent pallets or racking. Products that do not fully utilize the pallet surface leave wasted space on every pallet.
Product packaging, pallet size and storage methods can be optimized to create surprisingly large increases in storage capacity. Sometimes slight adjustments to product packaging will allow for better utilization of pallet space. Other times selecting a different pallet size will allow for better utilization of pallet space without having to adjust the packaging of the products.
The arrangement of products on pallets to maximize pallet usage while maintaining stability will also increase the amount of merchandise that can be stored per pallet and subsequently decrease the number of pallet positions needed to store the same amount of merchandise. This is a simple concept, however, many warehouses have never analyzed whether their standard loading pattern is optimized for their current product mix.